Custom electronics group discoverIE Group PLC (LSE:DSCV) struck a confident tone as it said it was on track to meet expectations for the current year thanks to a strong pipeline of design wins, a backlog of orders and acquisition opportunities.
This comes against a backdrop of softer market conditions in some sectors, which is expected to continue through the first half of the company's financial year.
For the 12 months ended March 31, the business posted a 10% rise in underlying profits to £57.2 million as the underlying margin grew by 1.6 percentage points to 13.1%.
"Over the past three years, the underlying profitability of the business has nearly doubled on revenues that have increased by almost 50% as the combination of organic growth with efficiencies and higher margin acquisitions came through," said CEO Nick Jefferies.
"This year's results reflect another strong performance against a tougher trading backdrop, with good growth in underlying operating profits and margin, as well as underlying earnings per share.
"Revenues in our Transportation, Renewable and Medical markets delivered strong organic growth whilst Industrial & Connectivity declined as a result of customer destocking."
Total revenues of £437 million were up 1% at constant exchange rates. Investors will be rewarded with a 12p dividend, up 5% year on year. Eye-catching in the results was the underlying operating cash flow, which was up 22% with a 103% conversion rate.
"Cash generation has again been strong reflecting both the high quality of earnings and the capital-light nature of the business," said CEO Jefferies.
"Naturally, higher interest rates have taken effect although we will see the corresponding benefit if and when rates reduce."